Turning Point in the Evolution of Soft Financing: The United Nations and the World Bank

Abstract

ABSTRACT Half a century age, a drawn-out and divisive debate that lasted almost a decade (1949–59) took place at the United Nations (UN) over a proposal to set up a Special United Nations Fund for Economic Development (SUNFED) to provide soft financing for the development of the UN and the World Bank, as it came to be known, in the economic development of developing countries. Had the proposal been approved, it would have given the UN decisive leadership. In the event, opposition mainly from the United States but also from the International Bank for Reconstruction and Development (IBRD) led to the establishment of the International Development Association (IDA), the soft financing arm of the World Bank, in part as a foil to stop SUNFED, greatly strengthening the Bank's role at the expense of the UN. This account of what took place is based largely on archival material in the UN Archives and Records Centre in New York, the two histories of the World Bank, and the role played by a senior member of the UN Department of Economic Affairs, Hans (now Professor Sir Hans) Singer, who was intimately involved in the attempt to establish SUNFED.